Whether purchasing a home with a spouse, friends or investors, it is essential to consider the two structures of real estate ownership, joint tenants and tenants in common. In this post, we will dive into the two types of tenancy in Ontario.
Joint Tenancy
The most common form of ownership in a first marriage is joint tenancy. In this form of ownership, the married couple is both on title and mortgage – the lawyer draws up the paperwork so that joint tenancy is in place in case of the death of one spouse. In the case of death, the house transfers directly to the living spouse. The benefit to the living spouse is that the house does not need to transfer through the estate or probate – the spouse can continue to live in the home. Upon the death of the remaining spouse, the home can be transferred to the children or as the estate mandates.
Tenants In Common
The most common use of tenants in common ownership is when friends or investors and children from a previous divorce (see below) own a home. If one owner or more were to die, the portion of ownership is passed to the estate as dictated by the will. This portion of ownership can be sold to the remaining owners or held by the entity as stated by the will.
If there are children from a first marriage/divorce in the case of a second marriage, tenants in common are not unusual. The reason is that upon the death of the spouse with children from another marriage, the ownership can transfer to the children, thereby avoiding the estate. The concern for the living spouse is that the children may wish to sell the house and/or have a say in how the house is run and who lives in it. In such a case, it is wise to have a living will that allows the living spouse to remain in the house until their death, at which time the home enters the estate for distribution.
Spousal Consent
In Ontario, the Agreement of Purchase and Sale requires that a spouse not already on ownership title must give permission to sell the real estate. A clearly defined section of the agreement requires the spouse’s signature. This is to protect a potentially unknowing spouse of the sale. This is a great way to ensure the spouse, not on the title, is protected during a divorce or marriage separation sale of the property.
➤ For more information on spousal consent and the matrimonial home check out:
- Dealing with Your Matrimonial Home During a Divorce
- Transferring Spousal Home During Seperation
- Selling Your Home After A Divorce
I jointly own property with my sister which we bought after my parents died. I lived here for a few years before we bought it and still live here. ownership is 50/50 and for the past 3 years I have paid for everything including all of the maintenance. We have 7 acres of grass which now costs $100 per cut right now a couple of times a week. My partner is saying that they owe nothing as I live here and do not pay rent. What can I legally do?
Hello Beatrice – my recommendation is to speak with a lawyer as this is not something that I can advise on from a legal perspective. All the best with the property. – RR